Legal Question in Real Estate Law in California
I started to short sale my house and the buyer that was going to purchase it changed his mind just before we went into escrow. a week later there was another buyer in place and that was in feburary of this year. we recently went into escrow but i then decided that I wanted to keep my house this before I signed anything or before escrow was funded. I proceeded to send out cancellation letters to the realtor to cancel the purchase agreement and also to the escrow company to cancel escrow before i signed any docs. a week later the buyer funded the escrow account after i sent out cancellations to every party involved. The realtor is telling me that the buyer isn't in agreement of the cancellation and is going forward with the purchase of my property. Is that possible for them to continue with the purchash if I don't sign any of the docs and I did formally send out cancellation letters?
2 Answers from Attorneys
It sounds like you signed the CONTRACT and it is that contract that obligated you to fulfill your end of the deal.
Escrow instructions, or "the docs" as you refer to them, are just instructions to escrow. They also comply with the contract terms.
If you do not complete your agreement for sale, you probably have liability for the breach of the contract and damages that flow from that breach. They buyer can sue you to have that contract specifically performed and the court may force you to sell anyway.
It all depends on the terms of the contract you signed as to whether you can cancel the contract or not.
I suggest you hire legal counsel to review what you did sign and give you advice.
You and the buyer entered into a contract that can only be cancelled if all parties agree and sign cancellation documents. He didn't. You'd better resolve this quickly, because it is obvious he intends to force a sale. He can do so, but it will take him time to go through the legal process to get a judgment against you, all the while your house is no longer available for sale to anyone else, and he will run up huge legal fees that you will be responsible for because of your breach of the contract. If serious about hiring counsel to help you solve this problem, feel free to contact me. I've been involved in RE litigation matters for many years.
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